THE ROAD AHEAD

DIESELGATE

Since the previous issue of Wheels, more details have emerged about the Volkswagen diesel scandal.

Here’s the latest, and how it affects Australian owners

WHAT’S THE CHARGE? ARE YOU AFFECTED? WHAT WILL VW DO? WHAT’S IT GOING TO COST YOU? SHOULD YOU SUE? HOW WILL VW PAY?

THE global Volkswagen Group – its brands include the premium VW, cut-price Skoda and luxury arm Audi – is accused of building ‘defeat’ software into cars built between 2008-15 that can sense if they are being emissions-tested, and switch into an ultra-low pollution mode that meets strict environmental standards on toxic pollutants such as nitrogen oxides. VW hasn’t yet confirmed the cheat helped its cars meet Australian emissions standards, but it has issued a recall because its vehicles “may not comply with emissions standards when driven under normal conditions”. You can check if your car is affected by visiting the Australian websites of the various brands and entering your vehicle’s unique identification number.

IT’S no longer a question of whether any Australian cars will be embroiled in the growing Volkswagen emissions cheat scandal because the company has confirmed that more than 91,000 Volkswagen, Skoda and Audi owners are now officially part of it.

AT THE time of writing, the company had not said how it will fix the software cheat, with speculation growing that it could cost VW up to $15,000 a car if complex urea-based systems are installed to help break down toxic emissions to acceptable levels. VW could retune the car’s software to always run the engine in its low-emission mode, but that may result in a performance and fuel use hit for owners. It also faces fines from the Australian Competition and Consumer Commission if its advertising is found to have misled buyers.

NICK Adamedis, the marketing manager for used car pricing guide Glass’s Information Services, says it’s still too early to tell what the Dieselgate scandal will do to resale values of affected cars, or VWs in general. However, what your car is worth come trade-in time will depend on how VW fixes the vehicles. If it’s a software patch that detunes the car or increases fuel use, used-car prices will almost certainly take a hit. If it’s a mechanical fix that doesn’t alter performance or fuel use, prices may not change. However, if wary fleet buyers cancel orders for cars that are already sitting on boats bound for Australia or running down the German production line, VW will have a glut of cars it suddenly needs to sell, which in turn will stab right in the heart of resale values.

LAW firms globally have smelled Volkswagen Group’s blood, and a number of class actions – where people act as a group rather than individuals – have sprung up in the wake of the scandal. Australia isn’t exempt, with Maurice Blackburn Lawyers one of the first to launch a consumer-law class action against Volkswagen, seeking compensation for the recall’s “impact on the vehicle’s future engine performance, efficiency, service intervals and resale value”.

According to the legal firm, thousands of affected owners have already signed up for compensation that may be years away from hitting their bank accounts.

PAYING for the emissions cheats means VW will soon have less money to spend.

Potentially facing the axe, significant delays or reduced spending are the Bugatti Chiron (the Veyron replacement), motorsport commitments to endurance racing (Audi) and rallying (VW), Audi’s rumoured move into Formula One, plans to establish a budget brand below Skoda and Seat, and niche halo vehicles such as the Golf R400.